China’s Software Industry Welcomes International Players

China’s Software Industry

There were 35,774 companies active in China’s software industry in 2017 according to Statista, a leading provider of market and consumer data headquartered in Hamburg, Germany.

In recent years, China’s Software Industry has evolved rapidly fostering a vigorous tech ecosystem among local players and foreign software enterprises.

According to Xie Shaofeng, Head of the Information and Software Services Division at the Ministry of Industry and Information Technology, local companies adopting foreign software services, such as cloud services and software, in their effort to fast-track digitalization is one of the key contributors in the rapid development of the software industry in China.

The indisputable presence of foreign software enterprises echoed to a combined revenue of $194.6 billion in China last year as estimated by The China Industrial Control Systems Cyber Emergency Response Team, a research institute affiliated to the ministry.

At a news conference in Beijing, Xie said:

“Regardless of how the international situation changes, China’s software industry will become more open to the global community.”

He stressed that as software technologies enter a new era, welcoming the foreign software enterprises will benefit the country in tapping into its growth opportunities. According to him, globally, industrial and manufacturing companies are attaching greater importance to building up their technological presence in software.

Xie emphasized the importance of international collaboration at this critical time highlighting that China’s favorable policies, including tax cuts, apply to foreign-funded software and semiconductor companies that comply with the nation’s laws and regulations.

As a testimony to the country’s openness to international collaboration, Xie mentioned that two of the five biggest contributors to the three most-applied open-source cloud projects are Chinese companies, which emphasizes China’s contribution in the global open-source software community.

According to Chen Zuoning, Vice-President of the Chinese Academy of Engineering, international cooperation is needed now more than ever to adapt to digital trends such as the commercialization of 5G, which will reshape how software is applied to different industries. Cloud computing is also expected to play a bigger role in boosting efficiency in corporate governance and factory production.

In an earlier interview, Bill McDermott, CEO of SAP, described the Chinese market as “Jewel in the Crown for SAP”. This aligns with the company’s effort in doubling down on its presence in China.

McDermott said,

“I will not be surprised if China becomes our largest market by 2025, with local companies scrambling to upgrade their corporate management methods and factories with digital technologies.”

In a CNBC interview earlier this year, McDermott said that for decades now, China has been considered SAP’s “second home”. He shared that SAP and China have collaborative investments despite the concerns over trade relations between the USA and China citing SAP’s strategic partnership with several firms such as the AliBaba Group, partnering with Jack Ma and Daniel Zhang and the Ali Cloud.

With the rapid growth for SAP Greater China, the German tech giant continues to invest in expanding its presence in the market for small and medium-sized enterprises, building up the local talent and infrastructure in China.

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